Are You An Accredited Investor?

Accredited Investors include, but are not limited to, the following individuals as defined by National Instrument 45-106 Prospectus and Registration Exemptions.

For Individuals

• A person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer
• An individual who, either alone or with a spouse, beneficially owns “financial assets” having an aggregate realizable value that before taxes, but net of any “related liabilities”, exceeds $1,000,000
• An individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300 000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year
• An individual who, either alone or with a spouse, has net assets of at least $5,000,000
• A person acting on behalf of a “fully managed account” managed by that person, if that person
  1. is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction, and
  2. in Ontario, is purchasing a security that is not a security of an “investment fund”

For Companies

• A pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada
• An investment fund that distributes or has distributed its securities only to
  1. a person that is or was an accredited investor at the time of the distribution,
  2. a person that acquires or acquired securities in the circumstances referred to in sections 2.10 (Minimum amount investment), or 2.19 (Additional investment in investment funds) of National Instrument 45-106, or
  3. a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 (Investment fund reinvestment) of National Instrument 45-106
• An investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt
• A trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be
• An investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser
• A person or holding company in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors
• A person other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements

Relevant Sections of National Instrument 45-106 Prospectus and Registration Exemptions

Section 2.10 – Minimum investment amount

1. The prospectus requirement does not apply to a distribution of a security to a person if
   1. that person purchases as principal,
   2. the security has an acquisition cost to the purchaser of not less than $150 000 paid in cash at the time of the distribution, and
   3. the distribution is of a security of a single issuer.
2. Subsection (1) does not apply to a distribution of a security to a person if the person was created, or is used, solely to purchase or hold securities in reliance on this exemption from the prospectus requirement set out in subsection (1).

Section 2.18 – Investment fund reinvestment

1. Subject to subsections (3), (4), (5) and (6), the prospectus requirement does not apply to the following distributions by an investment fund, and the investment fund manager of the fund, to a security holder of the investment fund if the distributions are permitted by a plan of the investment fund:
   1. a distribution of a security of the investment fund’s own issue if a dividend or distribution out of earnings, surplus, capital or other sources payable in respect of the investment fund’s securities is applied to the purchase of the security that is of the same class or series as the securities to which the dividend or distribution out of earnings, surplus, capital or other sources is attributable, and
   2. subject to subsection (2), a distribution of a security of the investment fund’s own issue if the security holder makes an optional cash payment to purchase the security of the investment fund that is of the same class or series of securities described in paragraph (a) that trade on a marketplace.
2. The aggregate number of securities issued under the optional cash payment referred to in subsection (1) b. must not exceed, in any financial year of the investment fund during which the distribution takes place, 2% of the issued and outstanding securities of the class to which the plan relates as at the beginning of the financial year.
3. A plan that permits the distributions described in subsection (1) must be available to every security holder in Canada to which the dividend or distribution out of earnings, surplus, capital or other sources is available.
4. A person must not charge a fee for a distribution described in subsection (1).
5. An investment fund that is a reporting issuer and in continuous distribution must set out in its current prospectus:
   • details of any deferred or contingent sales charge or redemption fee that is payable at the time of the redemption of the security,
   • any right that the security holder has to make an election to receive cash instead of securities on the payment of a dividend or making of a distribution by the investment fund, and
   • instructions on how the right referred to in paragraph (b) can be exercised.
6. An investment fund that is a reporting issuer and is not in continuous distribution must provide the information required by subsection (5) in its prospectus, annual information form or a material change report.

Section 2.19 – Additional investment in investment funds

The prospectus requirement does not apply to a distribution by an investment fund, or the investment fund manager of the fund, of a security of the investment fund’s own issue to a security holder of the investment fund if

1. the security holder initially acquired securities of the investment fund as principal for an acquisition cost of not less than $150 000 paid in cash at the time of the distribution,
2. the distribution is of a security of the same class or series as the securities initially acquired, as described in paragraph (a), and
3. the security holder, as at the date of the distribution, holds securities of the investment fund that have
   1. an acquisition cost of not less than $150 000, or
   2. a net asset value of not less than $150 000.

Definitions

“financial assets” means:

1. cash,
2. securities, or
3. a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation

“fully managed account” means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client’s express consent to a transaction

“investment fund” means a mutual fund or a “non-redeemable investment fund”, and, for greater certainty in British Columbia, includes an employee venture capital corporation and a venture capital corporation

“non-redeemable investment fund” means an issuer,

1. whose primary purpose is to invest money provided by its securityholders,
2. that does not invest,
   1. for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund, or
   2. for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund, and
3. that is not a mutual fund

“related liabilities” means:

1. liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or
2. liabilities that are secured by financial assets